First Solar, SunPower Ink Major Deals In China

The two largest American solar manufacturers, First Solar and SunPower, separately announced deals on Monday that will see their technologies being installed China, a growing market that can be difficult to crack for non-Chinese solar companies.

First Solar said it will be shipping 2 megawatts of solar panels for its first-ever demonstration project in China in early 2013. The Arizona company has signed the supply deal with Zhenfa New Energy Science & Technology, which plans to install the panels in Xinjiang Province in western China. Zhenfa has completed 410 megawatts of solar projects in China by the end of 2011, and it plans to increase that total to 1,100 megawatts by March next year, the company said.

SunPower, meanwhile, said it’s agreed to form a joint venture with Tianjin Zhonghuan Semiconductor, Inner Mongolia Power Group and Hohhot Jinqiao City Development Company to manufacture and install SunPower’s solar panels and trackers in China.

SunPower plans to put up $15 million for a 25% stake in the joint venture, which will be based in Inner Mongolia. The joint venture still requires the approval of the Chinese government, and the companies hope to secure that next year.

First Solar Tries Again

The deal with Zhenfa will give First Solar a landing opportunity in China, which the company tried to tackle when it signed agreements in 2009 for a 2-gigawtt plan in Inner Mongolia. That plan was supposed to be First Solar’s big entry into the Chinese market, but it’s been delayed quite a bit. The company is still working on the project, which originally was going to involve a 30-megawatt installation by China Guangdong Nuclear Power’s solar business. The agreement with China Guangdong has expired, said First Solar spokesman Ted Meyer. First Solar is now looking to work with someone else on the 30-megawatt project, which still requires a final approval from the Chinese government before construction could begin. First Solar was hoping the approval would come last year.

The 2-megawatt project is much smaller in scope but will provide a good opportunity for First Solar to show how well its solar panels will fare in the local climate. Solar panels contain cells that convert sunlight into electricity, and the cells’ performance can decline more quickly than expected because of dust, heat and other conditions. Solar panels are designed to last more than 20 years.

China has been setting larger and larger solar energy goals in recent years as it tries to increase renewable energy generation while supporting its troop of solar manufacturers. The global solar market has been beset by a glut of solar panels in the past two years, causing the prices to crash and many manufactures to go out of business or incur significant financial losses. First Solar has suspended plans to build more factories and closed production lines.

The conventional wisdom is that China would be a difficult market to tackle for non-Chinese solar manufactures and project developers since the country already has an ample supply of home-grown ones. On the other hand, given the vast majority of its manufacturers use silicon in their cells, China is keenly interested in supporting the development of other types of solar technologies and may well see First Solar as a good partner in that effort.

First Solar uses cadmium-telluride to make the cells. The company designs its own trackers that prop up and rotate solar panels to track the sun’s movement throughout the day. First Solar also develops and builds solar power plants that use, of course, its owns solar panels. In fact, the company is focusing on expanding its project development business because it’s more lucrative than simply selling solar panels.

SunPower, too, is aiming for more solar project development deals than solar panel supply agreements. The joint venture will give the California company a major entry into the Chinese market.

SunPower makes conventional solar panels that you see on the rooftops. But the technology that it’s bringing to China is newer and makes use of both the silicon solar cells and curved mirrors to concentrate the sunlight onto the cells. Concentrating and focusing the sunlight onto cells allow SunPower to use smaller solar cells to produce the same amount of solar electricity. For example, a 400-megawatt project that uses this type of solar equipment (along with trackers) will need less than 70 megawatts of solar cells, SunPower said. SunPower only launched this concentrating solar technology last year.

The deal isn’t the first in China for SunPower. The company shipped 1 megawatt of its conventional solar panels and trackers about 3 years ago, said spokeswoman Helen Kendrick.

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